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Okay, good afternoon, everyone, and thank you for attending our conference. I'm Susan Anderson, one of Canaccord's analysts in the consumer space, and we're very excited to have Aresculpt here with us, and in particular, CEO Yogi Dashnani and CFO Michael Arthur. For those in the audience who are new to the story, it will be helpful to provide a quick overview of the Arescelpt story. With that, I'll turn it over to Yogi. Susan, thank you so much, and thanks for having us at the conference. It's great to be here. folks just a quick bit about S-Cult so we're a premier body contouring company what that means is we do plastic surgery procedures particularly around fat removal, fat transfer and skin tightening we have 31 centers in North America where we do these procedures all procedures are minimally invasive the patient is awake during the procedure as well and you're back home within a few hours. Many people are back to their normal routine within 24 to 48 hours. So in that sense, very effective and minimally invasive. Average procedure is about $12,000 to $13,000. It's all cash pay. So that implies a certain demographic. So our patients tend to be more affluent, leaning more towards women. And then for us, we're seeing tremendous opportunity both in the fat removal, fat transfer, skin tightening space, but also with GLP-1s, people are looking for more aesthetic solutions which can help them complete their journey. So overall, it's a great business model, great margins, and we're really excited to be here. Great. Thank you. So maybe you've continued to make progress in the core business with positive underlying case growth in the second quarter. Can you share the drivers that have helped stabilize the business and what you're seeing today? Absolutely. So just for context, our business has stabilized over the last couple of quarters to positive case growth. And that's a trend change that we've been able to implement. What is really driving that is a few things. One, as I've joined over the last year and a half or so, we brought in new talent, which has strengthened the company. We've revamped our sales and marketing execution, which is really driving a lot of the top line. And then we're also just operating and executing with a lot Of Discipline. That's what's carried us through. And the results are showing with the second consecutive quarter of stability after, you know, after many quarters of decline. Okay, great. And then you mentioned GLP-1s as maybe being a driver as well, and I believe also that maybe from the side effects of GLP1s that could be a benefit, I guess, with your procedures such as skin tightening and skin excision, addressing loose skin and residual stubborn fat, and then the aloe clay providing an additional solution for volume loss. How are you assessing, I guess, the opportunity and the KPIs that investors should watch to maybe measure the traction there that you're getting with GLP-1 users? Yeah, absolutely. So first and foremost, for those who don't know, obviously everyone talks about selling GLP1s and the impact of GLP 1s. There's a lot of people trying to sell GLP ones. We are one of the scaled players out there who can address the side effects of GLp 1s, So if someone goes on the drug over six, 12, 18 months, the biggest side effects tend to be loose skin and then stubborn fat deposits. So you lost the weight, but now you have loose skin and you lost a fat, but you also lost volume along with that. So our core procedure helps with those already. We saw an opportunity to expand our procedures to get into skin excisions. So we've expanded that to our centers as well. around how do we reduce skin excision so that if there's excess loose skin from certain areas, we can take it out. Beyond that in body contouring, just yesterday we announced a partnership with Tiger Aesthetics for aloe clay. That's for volume restoration, so that's donor derived fat. So if somebody doesn't have enough of their own fat to transfer, they can get donor derived fat which can be injected into their body. All of that to serve the needs of GLP-1 patients to restore volume and to address loose skin. The traction's been really good. We started with standalone skin tightening late last year, middle of last year. And in the quarter we just announced, we did about 200 procedures related to skin removals. That's roughly mid to high single digits of our total procedure count. Then that's been growing quarter over quarter. And those, I guess, is that a good proximate for GLP-1 users coming to you to fix some side effects about mid-single-digit then? Great question. We're actually seeing more penetration of GLP1 users come into us than that number. It's more on how do we address their needs. So we are ramping up our abilities to meet their needs, and in the long term, we see this being a $100 million-plus opportunity. for context our business is about 150 million in top line so this can you know close to double our business great opportunity okay and maybe if you could talk about the drivers of the updated 2026 outlook and what gives you confidence and improvement in the fourth quarter yeah absolutely so as i mentioned over the last year or so we've undertaken a transformation that had involved getting the foundations right of the business investing in the right talent which we've done updating our sales and marketing and the performance over there that's allowed us to change the trajectory of revenue in our business and at the same time we are investing in the new procedure so all of those combined allow us to drive our top line forward and then we're making a conscious choice to further invest in marketing to continue to improve the long-term health of our business as well so that's that's been the driver for where we see this year going and end the year on a positive note as well. Okay. And then I guess on skin removal specifically, you've continued to see growth in procedures. Can you maybe talk about the economics of those procedures relative to the core AirSculpt cases in terms of ticket size, margin profile, physician requirements, and whether skin removal expands the addressable market, or does it mainly just deepen the wallet share with existing patients yeah you know there's a this is a great insight and learning for us around following the patient and following what consumers need so when we started doing standalone skin tightening or skin skin removals we went in with the mindset of people who come in for skin removers and what we started to see is folks are coming in they come in with, I have a problem. I have loose skin. Can you help me with that? And through that conversation, because it's a consultative process with the surgeon and with our sales consultant, through that conversation, many of them are saying, oh, yeah, I also have these stubborn fat deposits. So stand alone, the skin removal procedures might be lower than the $12,000 tickets. But what's practically happening is many of these patients are getting multiple procedures together, so the ticket tends to be higher. From a gross margin perspective, these are very similar gross margins to what we have in our co-procedure. So our gross margin percentage is around 60%, and these tend to follow the same. Okay. And then I guess what about the new Alloclay product? How should we think about the economics and the opportunity for that offering? Great question. So Allocay will be different. So allocay, because it's a product that's being injected into the body just it's there will be consumables costs we would have so we see that as adding to gross margin dollars it might be gross margin percentage diluted but it is gross margin dollar accretive so it will help us the expectation is it will help us on top line and bottom line growing both those and in the process expand the set of consumers we serve. Because today, if someone comes in, they don't have enough fat to transfer, or they choose not to do a fat transfer, there's limited options in how we can help them restore volume. Alloclique gives us another avenue to serve these patients better. Okay, great. And then you mentioned that your customer, obviously, given the price of the procedure, is typically higher income. Maybe if you can give us an idea of just the demographic and the type of customer that comes in and then I'm just curious too are you seeing that consumer given they are higher income pull back at all or do you think they're still willing to spend? Yeah so first of all on the consumer so our average ticket is $12,000 to $13,000 and it's all cash pay so that ends up being you know household income north of $100,000. A typical customer would be women 35 to 55 years of age, they're definitely more affluent. Having said that, we are seeing a lot of choppiness in the consumer environment. We continue to see that with our patients as well. We continue to that in the demand profile. And what we are focused on is how do we continue to engage, because there's still need and demand for aesthetic procedures. How do we continue to engage our target audience and bring them through our doors, show them the differentiation, and that's really helped us overcome variations in macro to be able to deliver stability and long-term growth. Okay, great. And then maybe if you could just walk us through the clinic-level unit economics in a bit more detail. You discussed approximately 1 million of build-out costs per clinic and about 60% gross margin, and most clinics historically have a payback within a year. I guess, what does a mature center look like in terms of revenue and then comp sales and contribution margin? Yeah, I can take that. So, our average clinic, mature clinic, does about 5 million in annualized sales. Gross margins across the portfolio is around 60%. And all of them have significant contribution margins. That's why we're we continue to be really bullish on de novo's long term. And all I think I mentioned all of our all of our clinics are profitable today. And so on the de novo front, as you mentioned, one to $2 million for build out costs, they're usually profitable in four to six months, usually paying back in a year to two and that's you know pretty unheard of for a multi-site consumer business which again gets us excited about the novo expansion when we get there okay great and then i think you operate about 31 corporate um centers today with i think the opportunity you've mentioned to grow to 300 locations i guess how should we think about that timeline of growth what should it what are you expecting it to look like yeah we've said there's really two key key markers for us to to uh continue de novo growth again. We paused it back in 2025, which is showing continued stabilization in the business. So we're two quarters in and we've shown that, but we want to see a little bit more there in terms of stabilized same center sales year to date. Again, we're flat, but want to see a lot more on that front. And then second is continued kind of cleanup of our balance sheet. So we have been, had made a concerted effort to pay down our debt. And then, as we've said on Ernie's call yesterday, priority for us is to refinance our debt as it matures next year. Okay, great. And then I guess just as the business recovers and volumes recover, how much operating leverage should we expect in the model? And I guess, where do you see the biggest opportunity to expand EBITDA margin from the current base? Yeah, so our EBITD margins today are about 10%. The company has seen 20, north of 20% EBITDO margins historically, so that's what gives us confidence we can get back to those levels. Gross margin, like I mentioned, is about 60%, and that's, it's pretty variable, so as we see additional volume come through, it'll still will kind of flow through at a 60% gross margin. So that still leaves us with 40%, 50% of operating costs that we'll see operating leverage as we see volume come through. Advertising, we're continuing to optimize. We can get more efficient there, but at some level we'll continue to spend in advertising to drive that volume. That still leaves, advertising is roughly 18 to 20% of revenue, so it still leaves with somewhere between 20, 30% of revenue that we can get operating leverage as we go. Okay, great. And do you think as you expand to more locations, that will also provide more operating leverage? It will, yeah, especially in that G&A bucket, because a lot of that's fixed costs in the corporate center. So as we add volume, whether it come from new DeNovos or our existing fleet, we expect to see strong flow through. Okay, great. And then where do you Think the biggest self-help opportunities still remain inside the business, whether that's marketing efficiency, sales conversion, clinic productivity, labor overhead, or service attachment? I can take that. For us, we're a very revenue-oriented business. So as revenue comes through, given the gross margin and given the flow-through profile, the business really turns on that. for revenue there's a right here right now what's driven stability is all the work that we put in into sales and marketing and just executing the discipline that's a that's here and now which is showing results the next leg of growth is around glp1 and how do we capture more of the increasing demand from glp 1 users for aesthetic services to to fulfill their needs and then for the future it's around de novo growth we we as we said we're in 31 locations we are not in long island we are not in uh indy we're not in portland we'renot in west palm beach this there's more locations that i can name where we are and you probably look at that and say wait those are those are meaningful population centers with the right kind of demographics yeah so it's really here and now, sales and marketing and discipline and execution, GLP-1 is the next leg of growth, and then DeNovo's become our future growth level. That's really what's going to drive growth for our business. Okay, great. And then I guess with the additional marketing investment you announced this quarter, where are you seeing the greatest opportunity to drive returns and sales with that? Yeah. So for context, we did announce that we continue to see opportunity to invest in marketing dollars for the year, that's really for us to invest in a few different things. One is investing in our brand, making sure that as we invest in our band, that delivers long-term value. Our brand awareness is still pretty low. One of the comments I get from a lot of our patients after they've gone through the procedure is, I wish I had known about this sooner, and this is the best-kept secret. make in part I'm happy they have great results in part like it to be not a great kept secret so we need to address that so that's going to be you know one one leg of investments the other one is GLP one users and how we speak to them how they react is different and you're learning that compared to core fat removal so we're as we invest more in marketing and testing we learn more and more so that will get more efficient, which will drive more revenue and reduce cost of marketing at the same time. Okay, great. And then I guess maybe if you could just talk about capital allocation priorities beyond investment in the business, or I guess what are the priorities between investments and go ahead. Yeah, our number one priority, as I just mentioned, is paying down our debt. We've made a significant improvement in the last year. We paid down, you know, over $30 million of debt in the last year, our focus more near-term is to refinance that debt while continuing to invest in these growth initiatives that Yogi's been talking about, sales, marketing, expanding brand awareness into our new services are important to us. So we're balancing those two with the critical near- term priority of getting our debt refinanced. Okay, great. And then I guess, so we talked about the consumer and it does sound like you're seeing a little bit of choppiness, I guess, what are your expectations as we kind of look out, you know, into the back half in 2027? I can take that. So look, we continue to see a choppy environment, but we are executing with discipline. I've been, I'm really pleased with how the team's coming together, how we're executing the transformation. For the back-half, what we have communicated to our investors is we expect third quarter to be down single digits. That's based on what we have been seeing. And then a return to growth in fourth quarter. So for the year, we'd be roughly flat to slightly up compared to year over year on a same store sales basis, which really would be a full year of stabilization and then growth as we exit the year. And then in 27 as well, so we look to build upon that momentum. Remember, GLP-1s, we're just getting started on that volume. We haven't announced any Denovo's, but that is in our future as well. So there's a lot of future growth available to us, and we're executing towards it. Okay, great. And then one last final question, I guess, as we close out. What do you think is the most misunderstood by investors on the story, and what do you want the audience to take away from today's discussion? It's a great question. so look over the last year year and a half of engaging with our investors they have seen the the stabilization that we've delivered they have seen the changes that we made and what that's done for our numbers what's that done for the business they're also seeing the growth that we are driving and focused on with the glp ones and just the just a balance sheet being in a much stronger position the growth vectors we are actively investing in we are making sure that we are sharing that along the with our investors no transformation is linear and if you want any proof of that just pick up our stock performance over the last three trading days and that will tell you a lot so transformations are not linear i think that's probably the thing that we're keeping in mind but we're razor focused on how do we how do you deliver for our investors how do we deliver growth, how do we deliver the refinance of our debt, so that the company can experience the returns and give the returns to shareholders, which I strongly believe in. Great. And what do you think is the most misunderstood by investors out there that you think the story is misunderstood about? I think it's the nonlinearity of the transformation. If you look at our journey, we've been making steady, continuous progress where it shows up in the numbers from a quarter to quarter perspective varies so we've had and we've heard those conversations the good thing is we we have a number of our long investors who understand the story and have been incredibly supportive and incredibly great at guiding us as well great thank you so much for joining us today